Let’s take a couple of examples, starting off where the quantity of each coin is in perfect equilibrium. StatiCoin and RiskCoin can be purchased with Ethereum (ETH). The prevailing ETH price is €200 and €2,000 Euros worth of both StatiCoins and RiskCoins have been bought. This results in a total of 20 ETH in the contract, 10 ETH each of StatiCoin and RiskCoin.
ETH Price = €200
Market conditions have been great and the ETH Price has doubled from €200 to €400. The value of StatiCoins as the name suggests is static so €2,000 of StatiCoin is now worth 5 ETH. As the value of ETH in the contract is 20, the remaining ETH are attributed to RiskCoin. This means that there are now 15 ETH for RiskCoin at €400 each making the value of RiskCoin €6,000 — three times the starting value. This feature is important, as it shows that investing in RiskCoin is better than simply investing in ETH (when predicting a price rise).
ETH Price = €400
Things of course can go the other way, now the ETH price halves from the original €200 to €100. The value of the StatiCoins must remain the same so €2,000 of StatiCoin is now worth a total of 20 ETH. As there is only a total of 20 ETH in the contract, RiskCoin is now allocated 0 ETH and therefore has a price of €0.
ETH Price = €100
The fact that the price of RiskCoins can go to zero means there are rules in place to ensure that new StatiCoins can’t be created when the RiskCoin price is 0 or when leverage is too high, ensuring that StatiCoins have sufficient backing. For more details see our whitepaper or your questions may have already been addressed in our FAQ section.
I know you’re interested in knowing how you can be part of the ICO — sorry to disappoint but there isn’t one and we’re not looking for any backers, although by purchasing RiskCoins for yourself you will implicitly be allowing more StatiCoins to be created. We don’t believe that this service, nor stablecoins in general, have room for a middle man to extract value so we’re releasing this as a demonstration of what our company, Genki FS can do.
Paul Edge – Co-Founder, Mathematician
Over 15 years of quantitative risk management experience within large multinationals. PhD from Imperial College and a diploma in actuarial techniques from the Institute of Actuaries.
Peter Cornforth – Co-Founder, Payment specialist
Previous work includes the award winning M-Pesa product with over 20M active customers worldwide, NFC services and Login and Pay with Amazon.